Cheesecake Factory is Thursday's IBD Stock Of The Day, as the casual dining stock traded near a buy point. Shares have logged an 11% rally since reporting better-than-expected first-quarter earnings with executives claiming the business is well positioned to "substantially absorb" impacts from President Donald Trump's tariff policies.
The Calabasas Hills, Calif.-based company announced late on April 30 a surprise 27% quarterly profit jump with revenue increasing 4%. The company is the parent outfit to The Cheesecake Factory, North Italia, the fast-casual Flower Child and other brands.
Cheesecake Factory's same-store sales increased 1% in Q1 with Flower Child's same-store sales growing 5%. Meanwhile, North Italia's same-store sales declined 1%. On the earnings call with analysts, Chief Financial Officer Matthew Clark said they would not be providing specific comparable sales or earnings guidance, but did give commentary on Trump's tariffs and the restaurant business.
Cheesecake Factory And Trump Tariffs
"We continue to evaluate the potential impact of the tariffs, along with the business levers we control to mitigate the effects," Clark said on April 30. "At this time, based on the tariffs as currently outlined, we believe we are well-positioned to substantially absorb the impact without changing our adjusted net income margin expectations."
Cheesecake Factory expects total Q2 revenue to be between $935 million and $950 million. Analysts predict $946 million in Q2 sales, according to FactSet. The company also forecast total 2025 revenue to be approximately $3.76 billion, which would be a 5% increase compared to 2024 and in line with analyst expectations.
Company executives added they predict low single-digit commodity inflation in the second quarter and that they will be evaluating pricing and will "lean into value" with any menu changes. However, Cheesecake Factory said its consumers have "remained consistent" and that it has not yet seen any change in ordering patterns.
Following the report, several analysts increased CAKE price targets. The stock currently has an average 54.80 price target and a hold rating, according to FactSet.
Argus analyst Christine Dooley raised the firm's Cheesecake Factory's price target to 60 from 57, maintaining a buy rating on the shares, noting that the menu changes, restaurant openings plan and commitment to maintaining margins will lead to stronger earnings.
Cheesecake Stock Performance
CAKE stock advanced 0.9% to 55.61, hitting 57.02 intraday, during Thursday's stock market action. Cheesecake Factory shares are in a cup-with-handle base with a traditional 56.26 buy point, according to MarketSurge chart analysis.
Since reporting its Q1 results late on April 30, Cheesecake Factory shares have jumped 11%. The stock has also gained 31% since hitting a recent low of 42.69 on April 7.
Cheesecake Factory shares are also up nearly 18% in 2025. Meanwhile, the 55 stocks in the IBD-tracked Retail-Restaurants industry have collectively gained 3.9% in this year's stock market.
Dow Jones fast-food giant McDonald's along with Darden Restaurants, Domino's Pizza and Brinker International are among the other stocks in the IBD-tracked sector.
Average True Range Within Guidelines
Cheesecake Factory stock has a 21-day average true range of 3.59%. The ATR metric is available on IBD's MarketSurge charting tool and gauges the characteristic breadth of a stock's behavior. Stocks that tend to make large jumps or dives in daily stock market action, the kind that can trigger sell rules and shake investors out of a stock, have a high ATR. Stocks that tend to make more incremental moves have lower ATRs.
The S&P 500 and Nasdaq are now in a power trend. Investors can buy stocks with ATRs up to 8%, though they should be wary of being too concentrated in high-octane names.
CAKE shares have a 94 Composite Rating out of a best-possible 99. The stock also has a 90 Relative Strength Rating and a 97 EPS Rating.
Investors can also keep tabs on the IBD Leaderboard watchlist, the IBD 50 list of top growth stocks and IBD SwingTrader along with the IBD Sector Leaders list.
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